Abstract
Public pension insurance has become a major form of social protection around the world. However, little is known about the association between public pension expansion and individuals’ fertility in developing economies. In this paper, we examine the effects of the New Rural Pension Scheme (NRPS) on the fertility of married women in rural China. Using data from the China Family Panel Studies (CFPS), the difference-in-differences approach is employed to estimate the impact of NRPS expansion on fertility outcomes. The robustness of results is checked through additional estimations, including difference-in-differences with propensity score matching, fixed-effects model, and instrumental variable approach. Results show that the NRPS expansion has a significantly negative effect on the number of children, and it reduces the likelihood of having a second child. The fertility-reducing effect of the NRPS is larger for the younger, well-educated women and those in high-income families. Considerations of the fertility effects and their population differences are needed in the impact evaluations of relevant public pension reform.
Highlights
Public pension insurance is considered as one of the major social security programs to improve social welfare and reduce inequalities
Our empirical findings, which are robust to several specification checks, indicate that the implementation of rural pension scheme has a significantly negative effect on the number of children, and it reduces the likelihood of having a second child
The estimated marginal effect of New Rural Pension Scheme (NRPS) on women’s number of children is -0.08, and the probability of second child for married women is decreased by 4.4% when they are covered by the public pension insurance
Summary
Public pension insurance is considered as one of the major social security programs to improve social welfare and reduce inequalities. Our empirical findings, which are robust to several specification checks, indicate that the implementation of rural pension scheme has a significantly negative effect on the number of children, and it reduces the likelihood of having a second child.
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